Ditching the UK for sunnier climes? Clever transfers and careful planning could help you fund your new luxury lifestyle

It is little
wonder that so many people choose to up-sticks and head overseas when figures show that 90 per cent of those that that make the move enjoy a better quality of life.

A whopping 320,000 people swapped rainy Britain for sunnier climes last year, with Australia, Canada
and the United Arab Emirates topping the charts as the most popular destinations,
according to the Centre for Future Studies.

Wherever you are planning to set up your new life it is important to
plan your move carefully, considering everything from setting yourself up a new home to sorting out your taxes. This is Money spoke to David Kerns, currency expert at Moneycorp, for some top tips on moving abroad.

Dream home: Getting the best deal on your currency exchange could help fund a luxury lifestyle abroad

Setting up an overseas bank account

The first thing you will to consider is your bank - as you will need to have somewhere to transfer your money to in your new home country, especially if you are moving abroad permanently.

There are several options to think about and your decision will depend on whether the move is temporary and where you will be receiving an income from.

You may have continuing bills to pay back home so prefer to keep an account open in the UK and open a separate local account for your day to day expenses while abroad.

Or you may wish to open an overseas account, which allows you to have two simultaneous accounts in different currencies if you will still be working for a UK company.

David Kerns explains that, thanks to the
global banking system, it has become a lot easier to set up an offshore
account before you leave UK shores.

He
adds: 'This is simpler than waiting until you arrive because while you
are in the UK you have the benefit of your banking history, so you can
prove you are a good ‘risk’ when it comes to repaying loans and credit
cards.'

If
you are setting up an account with a local bank abroad, or you will
need to apply for credit in your new country, you will need to remember
that your credit history will not follow you abroad.

James Jones, a credit expert at Experian says: 'If you move to another
country then your credit history won’t follow you. As a result, moving
abroad will usually mean you have to build a new credit record from
scratch.

He adds: 'It may help if you obtain a copy of your credit report
before you go and then take it with you. That way, you can offer it to
any lender you approach in the new country as evidence of your past
borrowing record.'

TO SELL OR NOT TO SELL

The first thing you will have to consider is how you are going to pay for your new life abroad.

This will depend on many factors, such whether you are moving for good, emigrating for a certain amount of time or planning on dividing your time between two countries

Tempting
as it might be to sell everything before you make a fresh start, you
should think carefully before letting go of your home, according to
David Kerns, currency expert at Moneycorp.

he
explains: 'If your dream move turns into a nightmare, having no
property to return to in the UK will make life infinitely more
difficult.'

If
you can afford to, you could consider renting out your home instead to
pay for a mortgage abroad as this will not only give you an income, but
it will also make it a lot easier to reverse the decision to move
overseas if necessary.

Getting your money from A to B

If you are transferring large amounts of
money, such as the proceeds of the sale of your home, it is important
to shop around for the best exchange rate rather than just head straight to your bank - it could make a difference
of thousands of pounds.

As Kerns points out: 'Your first port of call will usually be your UK bank, but this may not always be the best choice.

'Picking a currency specialist instead could get you a rate 3 or 4 per cent higher than your bank, as well as saving you money in transfer fees.'

For example, on a £100,000 transfer a difference of just 4 per cent would give you an additional £4,000 to play with - which will go a long way to help fund your new lifestyle abroad.

If you are still going to be earning money in the UK after you have emigrated, or plan to live in the UK but earn money abroad (for example on a holiday home which you rent out), you'll need to work out if you are liable to pay tax in both countries.

Kerns says: 'It is important to check to see whether the country you are moving to has a double taxation agreement with the UK, meaning you will not be taxed twice on your income.'

He explains that if a mistake is made, getting that money back could take some time.

If you are eligible for a UK State Pension you will still be paid even if you have moved abroad, for more help contact the International Pension Centre.

It may also be a good idea to consider speaking to a financial adviser if you are concerned about taxes when you move abroad.

To find an independent financial adviser in your area, try This is Money's low-hassle search toolhere.

When you get there

Naturally, when you first arrive you will want to find somewhere to live and schools if you have children.

However there are a few other things you need to consider as top priorities as well:

Insurance

The UK is one of the few countries in the world that offers free healthcare, via the NHS..

As an expat, even if it's only for a short period, you will need to find a decent international health-insurance policy.

'Neglecting to take out cover could be an extremely expensive mistake. For example it can cost as much as £11,000 just to treat a broken arm in Spain without insurance, according to the Association of British Insurers,' said Kerns.

'If you are retiring overseas, then take a look at what healthcare – if any – may be available to you for free, and put cover in place for any additional healthcare services you think you might need in the future.'

As well as finding a suitable policy for your new home, you'll need to inform your provider in the UK of any changes, for example if you are renting out your old home while you living abroad, and you may even need to take out specialist insurance.

Specialist holiday-let insurance will cover things that a normal policy might not, such as covering your home when it is unoccupied for long periods or including public liability, theft and accidental damage cover.

Providers such as the AA, Endsleigh and even Tesco Bank offer unoccupied property cover, but for holiday let insurance you will have to opt for a specialist - you could try using an insurance broker, or a specialist provider such as Boshers or Shofields.

If you don't, your policy will probably become invalid and your insurer may refuse to pay out in the event that something goes wrong, leaving you to cover the bill.

Even if you are leaving your home empty there will probably be changes to your home insurance policy.

If you plan to split your time between home and abroad - an increasingly attractive retirement option - or you have an income in the UK, you will likely be making regular transfers between currencies.

This means you are again faced with the problem of how to keep your costs down while making the currency exchange.

Again, a currency specialist could be a good option.

Kerns explains: 'Some specialists offer automatic transfers from the UK to your overseas account, which means you do not have to think about calling your bank to make the transfer each month.'

This will be infinitely less hassle and help to avoid the danger of missed payments.

Returning home

If you do return to the UK in the future, you will need to reverse the procedure you went through when you emigrated.

'Make sure you tie up any affairs in your adopted home, including paying off any outstanding debts, and notify HM Revenue & Customs that you are on your way back,' says Kerns.

Planning ahead will not only help you to save money, it can also make your expat journey a smoother one.

Remember, if you need to apply for credit when you get back to the UK, financial institutions will not be able to access your credit history abroad - effectively wiping out any credit history you have built up while living abroad.

Experian's Jones advises: 'If you are returning to the UK after a period overseas then your credit rating priorities should be to get back onto the electoral roll as quickly as possible and to obtain some basic credit products, such as a bank account and a mobile phone contract, to help rebuild your credit history.

He adds: 'If you weren’t away for long you may have remained on the electoral roll – you can check with this your local council. You may also have kept some lines of credit open in the UK while you were away, which will go a long way towards helping you re-establish a great credit rating here.

Worried about your credit history? Learn how to check and improve you credit score here

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Ditching the UK for sunnier climes? Clever transfers and careful planning could help you fund your new luxury lifestyle